Subject to the increase in uncertainties due to the impact of the epidemic, local textile companies’ plans for overseas investment and rapid expansion have also undergone significant changes.
Today (12month24) evening, the world’s largest manufacturer and supplier of colored yarn——Huafu Fashion Co., Ltd. (hereinafter referred to as “Huafu Fashion” span>) issued an announcement stating that the company’s eighth board of directors held today’s first extraordinary meeting in 2021 reviewed and approved the “Regulations on Changes in Investment Projects with Partially Raised Funds” Proposal”, agreeing to invest the company’s 2021 funds raised from non-public issuance of shares in Huafu (Vietnam) 50 The Wanding New Yarn Project (Phase I) was changed to the 30Wanding Intelligent Spinning Industrial Park Project (the project is implemented in Huaibei City, Anhui Province).
Huafu Fashion explained that due to changes in the external market environment and the impact of the epidemic in Vietnam, the construction progress of the Huafu (Vietnam) 50 new yarn project (Phase I) has been Delayed, the implementation cycle is passively lengthened, and there is a risk that investment returns will not meet expectations.
According to the announcement, the implementation location of the Huafu Fashion30 Ten Thousand Spindles Intelligent Spinning Industrial Park project is located in the Huaibei High-tech Industrial Development Zone, Anhui, with a total project land area 438485㎡ (equivalent to 657.72mu, of which 133.84mu of the company’s existing land are used , new land523.88 acres), total investment1.680 billion, total construction area of new buildings span>278390 square meters, planned to build 3 spinning workshops, supporting the construction of required warehouses and public works, construction completed Later, the production scale of 30 million spindles of high-grade new yarns was formed.
Huafu Fashion predicts that after the project reaches full capacity, it can achieve operating income of 1.58058 billion yuan in a normal year, and the total annual profit after reaching full capacity is 645410,000 yuan. The financial internal rate of return after income tax is 8.76%, and the investment payback period is 9.13 (including the construction period).
Hao Shuai, an analyst at Bank of China Securities, previously said that Huafu fashion end customers include well-known domestic and foreign brands, and the current overseas epidemic is still severe, which has an inhibitory effect on consumers’ purchasing intention and consumption ability. If overseas markets in the future As the epidemic worsens, the company’s overseas orders will be affected. In addition, Huafu Fashion has established a subsidiary in Vietnam, and there is a certain risk of the epidemic, which may affect the company’s production capacity.
However, in Hao Shuai’s view, with the advantages of taxation, labor costs and other advantages, yarn production capacity has been transferred to Southeast Asia. Huafu Fashion, as the first to launch the market, has obvious advantages. Vietnam’s labor, land, raw material and other costs are lower than domestic levels, and it has preferential tax policies such as export tax rebates and income tax exemptions, which promotes the transfer of the yarn industry to Vietnam. However, starting from 2016, Vietnam’s approval of foreign investment projects has become stricter, and land prices have increased, making it more difficult to transfer production capacity. Since 2013, Huafu Fashion has closely followed the trend of the textile industry moving to Southeast Asia and started its global industrial layout. Therefore, it has a clear first-mover advantage. As of now, Huafu Fashion has Vietnam has a production capacity of about 30 million tablets.
What needs to be noted is that Vietnam’s market resources are sufficient and coupled with the international trade environment, an industrial cluster has been formed near Huafu Fashion’s production base in Vietnam, including the company’s terminal downstreamAdidas, span>Nike and other internationally renowned brands have set up factories in Vietnam. Financial reports show that in 2020, Huafu Fashion’s overseas sales The gross profit margin reached 8.54% and remains at a high level. It is expected that Vietnam will gradually become Huafu Fashion’s all-round production base in Southeast Asia to meet the needs of customer groups in Southeast Asia. , helping the company’s overall gross profit margin increase.
Public information shows that Huafu Fashion was founded in 2000. It mainly sells medium and high-grade colored yarns, and provides high-end new gray yarns and dyed yarns, as well as fashionable yarns. Trends, raw material and product certification, hang tags, technical consulting and other value-added services. From 2017 to 2020, Huafu Fashion’s operating income was 125.97 billion, 143.07billion yuan, 158.87billion yuan, 142.32billion yuan, span>2021The first three quarters�The company’s order volume and price both increased, achieving operating income of 127.15 billion yuan, a year-on-year increase of 46.84%.
As of the end of the first half of 2021, Huafu Fashion has a yarn production capacity of 200Ten thousand spindles, annual output28Ten thousand tons of new yarn, production base covering eastern China, Xinjiang, Vietnam and other places,Obvious advantages in production capacity and scale. The downstream of color spinning yarn is mainly used in the textile and clothing industry including sports, leisure, underwear and infant products. End customers include H&M, ZARA、POLORL、GAP、UNIQLO and other international brands as well as domestic brands such as Semir, Li Ning and Septwolves.
As of the publication of the First Textile Network today evening, Huafu Fashion closed at 4.36yuan/ shares, a decrease1.36%, market value78.20 billion yuan.
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